REV Group's Return on Invested Capital Insights

According to Benzinga Pro, during Q3, REV Group REVG earned $28.50 million, a 17.87% increase from the preceding quarter. REV Group's sales decreased to $593.30 million, a 7.82% change since Q2. In Q2, REV Group earned $34.70 million, and total sales reached $643.60 million.

What Is ROIC?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q3, REV Group posted an ROIC of 3.69%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

For REV Group, the positive return on invested capital ratio of 3.69% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.